Q: In a past
column, you wrote "Grants for starting a business are few
and far between." However, plenty of resources tout that the
government, by law, has to give approximately $350 billion in
grants for a variety of purposes (think Matthew Lesko). So once and
for all, I need to know whether there are actual U.S. grants or if
this is just a ploy to sell a directory.

A: There are grants-monetary aid
that a recipient does not have to repay-they are just few and far
between. Here's what author and infomercial guru Matthew Lesko
had to say when we put your question to him:

Grants are available, but from less than obvious places, such
as state and local organizations and nonprofits. Finding them is
the issue. Use GovEngine.com for state and local information; for
nonprofit sources, try searching public libraries.

Even more valuable is a government contract. Lesko advises
becoming savvy about how governments award contracts and leveraging
this information.

We also asked Lesko to identify grant recipients. His staff
supplied us with the names of five business owners who received
grants. We talked with each of them and found that one, Jim Bell,
had used Lesko's book Free Money to Change Your Life to start his
business. He obtained a Vocational Educational Services for
Individuals With Disabilities grant from the New York State
Education Department.

Another of Lesko's examples led to the Amarillo Economic
Development Corp., which, since 1996, has provided 24 grants to
businesses. Two recipients were startups with no financial history,
and five were less than 12 months old. Sales-tax revenue is the
source of funding. Unfortunately, this appears to be the only
program in the nation using public money this way.

As you can see, grants to start a business are limited to people
in special circumstances or those lucky enough to live in a locale
where funding is available from state or local sources.

What, then, are your best sources of funds? Many people keep
their existing job and develop their business as a sideline. Some
of the more daring among us take the very risky path of borrowing
on credit cards or with a home equity loan. The problem is, you
never know for sure how long it will take to get a business going
to the point that it can support you. Experience suggests
everything takes at least twice as long as we expect.